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Indian rupee opens higher against UAE dirham ahead of budget

Experts say the key to making both the stock market and bond market happy would be a theme that focuses on capex and fiscal consolidation

Published: Wed 1 Feb 2023, 9:58 AM

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The Indian rupee opened on a positive note and gained 12 paise to 81.76 against the US dollar (22.27 against UAE dirham) in early trade on Wednesday, ahead of the Indian budget session.

At the Indian interbank foreign exchange, the South Asian currency opened at 81.76 against the dollar, registering a rise of 12 paise over its previous close.

On Tuesday, the rupee depreciated by 36 paise to close at a three-week low of 81.88 against the US dollar after the Economic Survey 2022-23 said the rupee may remain under pressure on account of the plateauing exports and subsequent widening of the current account deficit.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.02 per cent to 102.08.

Brent crude futures, the global oil benchmark, declined 0.48 per cent to $84.49 per barrel.

The focus now will be on the government’s fiscal consolidation path when it presents the Union Budget FY24. Investors will also eye the outcome of the Fed meeting later in the evening, forex traders said.

“We have the Union Budget today. We believe the key to making both the stock market and bond market happy would be a theme which focuses on capex and fiscal consolidation,” IFA Global Research Academy said in a note.

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India’s Finance Minister Nirmala Sitharaman on Wednesday will present her fifth straight Budget at a time when the economy is slowing due to global headwinds and specific sectors need attention.

In the run-up to the budget presentation, expectations are rife that she may tweak income-tax slabs to provide relief to the middle class and increase spending on the poor through programmes such as the rural job scheme while ramping up financial incentives for local manufacturing. But she has to do all this while staying on the course of the fiscal consolidation path.

In the Indian equity market, the 30-share BSE Sensex was trading 352.75 points or 0.59 per cent higher at 59,902.65. The broader NSE Nifty advanced 96.75 points or 0.55 per cent to 17,758.90.

Foreign Institutional Investors were net sellers in the Indian capital market on Tuesday as they offloaded shares worth Rs54.39 billion, according to exchange data.

(With inputs from PTI)

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